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2017 Supreme(Bom) 263
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.M. BORDE & A.S. GADKARI, JJ.
Narendra Plastic Private Limited and Ors. - Petitioners
Versus
DBS Bank Limited - Respondent
WRIT PETITION No. 1338 of 2016 ALONG WITH WRIT PETITION No. 2046 of 2016
Decided On : 28-02-2017
Mr. Gaurav Joshi, Mr. Piyus Jhaveri, Mr. Vinod Kothari, M/s. Apex Law Partners for the petitioner in Writ Petition No. 1338 of 2016 and for the respondent in Writ Petition No. 2046/2016.
Mr. Zubin Behramkamdin, Ms. Vidya Naik, Mr. Huzefa Nasikwala, Mr. Raman Misra, Ms. Nikita Mahadik, Mr. Ganesh Narkhede, Nasikwala Law Office for Respondent in Writ Petition No. 1338/2016 and for petitioner in Writ Petition No. 2046/2016.
Important Point: If the Court is convinced that the defendant had otherwise knowledge of the proceedings and he could have appeared and answered the plaintiff's claim, he cannot put forward a ground of non-service of summons for setting aside ex-parte decree passed against him by invoking Rule 13 of Order IX of the Code.
Headnote:Recovery of Debts Due to Bank and Financial Institutions Act, 1993 - Section 22-Regulations of Practice of DRT, Regulation 19(3), (4), (6)-Recovery of debt.-Director of Company admitting service of notice on him without disputing his address on postal envelop, cannot make any grievance in respect of service of notice.
Petitioner No. 2 has not disputed his address and has in fact admitted the service of notice on him, in the memo of writ petition. A finding has been also recorded by the DRT while rejecting the application tendered by the petitioners for setting aside ex parte decree that the petitioner No. 2 has not disputed service of notice to him. What has been disputed by respondent No. 2 is that there is no service of notice sent to him on the registered address of the company.
The objection raised is required to be rejected, since, admittedly, petitioner No. 2 has not disputed receipt of the notice. Admittedly, petitioner No. 2 is the Director of the Company. Apart from this, notice transmitted on the address of the company if not claimed shall also be termed as a good service. Sub- regulation (6) of Regulation 19 provides specifically that where the Summons or Notice is returned with postal remarks such as `refused`, `unclaimed`, `not claimed`, `intimated` or `intimation given` it may be declared that the Summons or Notice is served.
Summons or the Notice has not been claimed by both the petitioners though sent on the address of the Company and includes Director. Therefore, it must be presumed that there is proper service of notice and the finding recorded by the Appellate Forum as regards the deficiency in service of notice is not correct and deserves to be set aside. Decree passed ex parte shall not be set aside merely on account of defect in service when the parties have posted with the knowledge of the proceedings.
Recovery of Debts Due to Bank and Financial Institutions Act, 1993 - Section 30-A-Appeal.-Appeal cannot be entertained by DRAT without pre-deposit of amount as required under Section 30 of Act.
In the instant matter, in order to test the bona fides of the petitioners it was ascertained as to whether the petitioner is willing to deposit at least 25% of the amount. However, the petitioners have specifically expressed their inability to deposit the amount. The dues payable to the bank by the petitioners on the date of presentation of the proceedings before the DRT were more than Rs. 22 Crores. The petitioners have not denied the factum of advancement of loan by the bank to them. The petitioners did not have any intention to make payment of loan amount advanced by the bank. The petitioners are admittedly defaulters and do not have intention to repay the amount. In such situation, the Court need not exercise extraordinary jurisdiction under Article 226 of the Constitution of India in favour of such petitioner who is a unwilling to deposit any amount and to show his bona fides.
R.M. BORDE, J.
1. Heard.
2. Rule. Rule is made returnable forthwith. By consent of parties, both the petitions are taken up together for final hearing at the admission stage.
3. Both these petitions are presented objecting to the order passed by the Debt Recovery Appellate Tribunal, at Mumbai in Appeal No. 203 of 2015 Misc. Application (M.A.) No.520 of 2015. The Appeal No. 203 of 2015 has been presented by the petitioners in Writ Petition No.1338 of 2016 (i.e. original defendants in O.A.No.32 of 2014) for setting aside the order passed in Original Application as well as Misc. Application No.24 of 2014. M.A.No.520 of 2015 is presented in the appeal claiming exemption from making pre-deposit of the amount.
4. The original applicant-DBS Bank Ltd., before the Debt Recovery Tribunal-I, Mumbai (for short, DRT-I) presented proceedings i.e. Original Application No.32 of 2014 against the petitioners-original defendants) (the parties are referred to as per the status in Writ Petition No. 1338 of 2016). According to the respondent-bank, the petitioners-Company applied for sanction of multi line financial facilities comprising of working capital facility, sales bill/invoice as well as discounting facility of Rs.100 Million for Working Capital requirement and by issuing sanction letter dated 31st August, 2009, the financial assistance of Rs.100 Million has been sanctioned to petitioner No.1 herein (original defendant no.1) for which the petitioner No.2 (original defendant no.2) executed all necessary documents in favour of the respondent-bank (original applicant). At the request of petitioner (defendant no.1 Company) the respondent-bank (original applicant) sanctioned additional multi line credit facilities of Rs.100 Million vide sanction letter dated 2nd November, 2011.
5. Since the petitioners-Company herein failed to deposit the amount, the proceedings came to be presented for issuance of Recovery Certificate for an amount of Rs. 22,91,83,737/- together with interest at contractual rate from the date of presentation of original application till the payment and realization of the entire amount. On presentation of the Original Application, the Respondent-bank herein tried to serve the notices on the petitioners, however, those were returned back with postal endorsement as “Unclaimed”. The service was deemed to be a good service. According to law, the Original Application No. 32 of 2014 was proceeded ex parte and the Debt Recovery Tribunal-I, Mumbai (DRT-I) allowed the original application directing the petitioners (original defendant Nos. 1 and 2) herein, jointly and severally, to pay to the respondent-bank a sum of Rs.22,91,83,737/- (Twenty Two Crores, Ninety One Lakhs, Eighty Three Thousand, Seven Hundred and Thirty Seven Rupees) with subsequent simple interest at the rate of Rs.10% per annum from the date of application till realization. It is also declared that the repayment under Recovery Certificate amount is duly secured by valid and subsisting First pari passu hypothecation and charge on the present and future current assets, as, more particularly, described in Exhibit-J in Schedule-I of the Original Application No.32 of 2014. The petitioners herein aggrieved by the decision in the Original Application presented an application to the Tribunal itself requesting for recall of the ex parte order dated 27th June, 2014. The application was registered as Miscellaneous Application No. 24 of 2014.
6. It is contended in the application by the petitioners that there was no proper service of summons, the door number of the registered office address of petitioner No.1-Company (defendant No.1) is mentioned as 712-725 instead of 714-725 and that the bank has purposefully mentioned the wrong door number so as to obtain ex parte recovery certificate/order. It is claimed that there was no service of notice on the petitioners and as such the ex-parte recovery certificate deserves to be set aside. The application tendered by the petitioners here
